Financial spillovers of foreign direct investment: Evidence from China

• 成果类型: Article
• 署名作者: Ding, Haoyuan; Lin, Shu; Wu, Shujie; Ye, Haichun
• 署名单位: Shanghai University of Finance & Economics; Chinese University of Hong Kong; Zhejiang University; The Chinese University of Hong Kong, Shenzhen
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2024.103890
• 发表日期: 2024
• 关键词: FDI; Financial spillovers; Trade credit; bank loans

摘要

We study the financial spillovers of Foreign Direct Investment (FDI) to local suppliers through a trade credit channel and a bank loan channel. Using rich Chinese firm-level data, we provide robust evidence that a high concentration of FDI in downstream industries substantially reduces domestic suppliers' trade credit provision and improves their access to bank loans, especially unsecured loans. A variety of empirical strategies suggest that the effects are causal. Furthermore, the beneficial bank loan effect is more pronounced for local suppliers facing more severe information frictions. We also use supplier-customer links to provide additional evidence for FDI's financial spillovers.